[et_pb_section fb_built=”1″ _builder_version=”3.0.47″ custom_padding=”30px|0px|54px|0px”][et_pb_row _builder_version=”3.0.47″ background_size=”initial” background_position=”top_left” background_repeat=”repeat”][et_pb_column type=”4_4″ _builder_version=”3.0.47″ parallax=”off” parallax_method=”on”][et_pb_text admin_label=”PMI Removal Appraisals” _builder_version=”3.11.1″]

PMI Removal Appraisals

 

 

PMI, the acronym for private mortgage insurance, allows individuals to purchase their home with less than a 20% down payment. If you are paying PMI, the question you need to ask yourself is, “Is it time to stop paying monthly PMI into an escrow account and instead start putting that money into my pocket?”

Every month, if you’re like most of us, you dutifully make your mortgage payment. Have you ever given any thought to exactly what makes up your monthly payment? For most of us the mortgage payment pays off the mortgage loan as well as taxes and insurance. A portion of your payment may be put into an escrow account to pay for real estate taxes and insurance (such as homeowners, hazard, flood, PMI, etc..).

It’s likely you are paying PMI if you purchased your home with conventional financing and put less than 20% down. Private mortgage insurance protects the lender or investor against loss if a borrower stops making payments. Often, homeowners mistakenly pay this insurance years after it’s no longer needed and as a result end up paying thousands in useless insurance premiums.

Here’s the good news that many homeowners don’t realize…you can force the lender to cancel PMI insurance once you’ve reached 20% equity in your home. You can reach this equity level by appreciation, improvements made to the home or by paying down the principal balance of the mortgage (or any combination of the three). All you have to do is request in writing that the private mortgage insurance be canceled (most lenders have a brief form which must be filled out) and provide the lender with proof of sufficient equity over 20%.

In most cases, the necessary proof is a state certified appraisal. Recent legislation (the Homeowners Protection Act) requires servicing lenders to make homeowners aware of the existence of any PMI they might be paying for and the requirements necessary to have it cancelled. Fortunately, you don’t have to wait for the lender’s notification to rid yourself of PMI. In most cases, if you have equity of 20% or more you’ll be able to cancel it almost immediately.

PMI is not required in all instances. The general rule is that if a homeowner has put down less than 20% down on a home purchase (single family), mortgage insurance will be required. Homes purchased with a down payment of at least 20% should have enough equity to cover any potential losses by the lender, so PMI is generally not required. There has been a surge in the mortgage insurance industry because of the popularity of purchasing homes with less than 20% down. MICA claims that because of mortgage insurance making up for the down payment difference, over 15 million Americans have been able to purchase homes over the past four decades.

PMI does not protect a homeowner against loss, so a borrower that’s required to purchase it will probably never deal with the mortgage insurance company itself. All dealings concerning mortgage insurance are usually handled by the lender. It’s the lender (or the eventual purchaser of your mortgage loan, if any) who has the ultimate decision when it comes to mortgage insurance. This means how much and when the homeowner has built up enough equity in the property to drop the insurance is decided by the lender. Therefore one must remain in contact with the lending institution which services their mortgage (collects the monthly payments) to inquire about this type of insurance and the requirements necessary to have it cancelled.

After a homeowner has built up 20% equity (single family, owner-occupied residence) in the home, they may begin to initiate steps towards canceling the mortgage insurance. Please note that some banks may require as much as 25% equity – check your loan documents to ascertain what applies in your situation. The first step is to contact the lending institution to where you send your mortgage payments (loan servicer). This may or may not be the lender who gave you the loan originally. Your loan servicer will be able to help you with the cancellation procedure and will also be able to tell you exactly how much your remaining mortgage balance is. Every loan servicing institution can have different policies regarding this procedure. Ask your servicing lender to provide in writing their specific requirements to cancel PMI insurance.

Keep in mind it’s the servicer’s ultimate decision and they’ll take many factors into consideration including the borrower’s payment history over the life of the loan before allowing you to drop this insurance. This factor alone could alter the servicer’s decision.

Although mortgage insurance may have allowed you to purchase a home, there will come a time when this added monthly expense will no longer directly benefit you. Therefore, it’s in your best interest to keep the provisions surrounding it’s cancellation in mind because no one is going to cancel it for you.

Ultimately, you are your own financial advisor and even the smallest expenses should be eliminated if possible. By continuing to carry PMI which is no longer required nor needed, only decreases the amount of money you have available in your pocket or your bank account.

Most lenders require a real estate appraisal by a state certified appraiser as the primary proof required to eliminate unnecessary PMI insurance. Timberline Appraisal specializes in helping people just like you rid themselves of unneeded and unwanted PMI insurance.

Give us a call today with any questions you might have and also check out our “Praise” page and see what others are saying about Laurel Boyer and Timberline Appraisal.[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section fb_built=”1″ admin_label=”Get a Free Quote Section” _builder_version=”3.5.1″ background_color=”#0c71c3″ background_image=”https://www.bigbearappraisals.com/wp-content/uploads/2018/08/IMG_1029332.png” background_blend=”overlay” custom_padding=”15px||15px|” global_module=”950″][et_pb_row custom_padding=”15px|0px|15px|0px|false|false” custom_margin=”0px|||” _builder_version=”3.5.1″][et_pb_column type=”4_4″ _builder_version=”3.0.47″ parallax=”off” parallax_method=”on”][et_pb_text _builder_version=”3.5.1″ text_font=”||||||||” text_text_color=”#ffffff” text_font_size=”22px” header_font=”|700|||||||” header_font_size=”33px” text_orientation=”center” background_layout=”dark” custom_margin=”|||” custom_padding=”0px||0px|”]

Get a FREE Quote for Your Appraisal

Receive a complimentary price quote for the Appraisal Services that fit your needs.

[/et_pb_text][et_pb_button button_url=”/free-quote” button_text=”Click Here For Your Free Quote” button_alignment=”center” _builder_version=”3.5.1″ custom_button=”on” button_text_size=”20px” button_text_color=”#ffffff” button_bg_color=”#e09900″ button_font=”||||||||” button_use_icon=”off” button_text_size_phone=”18px” button_text_size_last_edited=”on|phone” background_layout=”dark” custom_margin=”||1px|” custom_padding=”||7px|”][/et_pb_button][/et_pb_column][/et_pb_row][/et_pb_section]